Ujjivan Small Finance Bank to take 91% hit on distressed assets

(SFB) has finalized the sale of its non-performing assets (NPAs) and written-off loans totaling ₹364.51 crore to an Asset Reconstruction Company (ARC). This transaction, completed on February 28, 2025, involved a significant haircut of approximately 91%, as the bank received ₹34.26 crore for the distressed assets. The sale aimed to enhance Ujjivan SFB's asset quality and financial health. The bank had previously maintained an overall provision coverage of 66.51% on this loan pool, indicating a cautious approach to potential risks. Despite this substantial write-off, Ujjivan SFB reported a gross loan book of ₹30,466 crore, reflecting a 9.8% year-on-year growth. The bank's secured loan portfolio also expanded, accounting for 39.3% of the total loan book as of December 2024, up from 28.3% in the previous year. This strategic move underscores Ujjivan SFB's commitment to strengthening its balance sheet and focusing on sustainable growth. Source: ET Now No Recommendation